Wednesday October 29, 2014

Table of Contents

 

Q: I wrote to Miles Franklin a couple of months ago asking why the mining companies don't get together to deal with the price of silver. Your response was that it would be illegal. However now I see Keith Neumeyer of First Majestic Silver Corp. is asking other mining companies to join him in holding back some of their production. What is the story with this collusion? Is this legal? If it is, why didn't the mining companies do this a long time ago? Either way I am really glad to see that someone has a pair to take an active role in dealing with the paper manipulators.

 

Bill Holter's Answer:

 

I am not a lawyer but as I understand it, companies cannot "collude" together in the U.S. to fix prices either up or down.  I do not know the international laws but OPEC is an example of an out in the open cartel which nudges prices in various directions while acting in unison with supply considerations.  That said, I suggested last month in "An open letter to the mining industry" that people contact their companies and act in their own best interest by selling only what is necessary for operations and withhold the rest until prices are better.  I spoke with the CIO of First Majestic while at the New Orleans investment conference, I was told their action had been discussed prior to my letter going out.   But, he said they had (as have other companies) received many letters (thank you everyone!) requesting this.  I asked because I was curious, if the letter made any difference, he told me "no, we would have done it anyway."  ...Upon greeting him he said, "Oh, you're the one behind the letter" so I'm guessing they did get quite a few.

 

Q: Is it smarter to buy numismatic gold coins or gold bars/ Why?

 

Andy Hoffman's Answer:

 

Bullion coins and bars are the preferred form of investment for the purpose of asset protection and/or financial insurance.  They account for nearly all Miles Franklin's business, as we believe strongly in the merit of buying as close to the product's "intrinsic value" as possible.  This way, you get as many coins for your money as possible, with absolutely zero "subjective" value.  Some firms guide neophyte PM investors toward numismatics with promises they are rare, confiscation-proof, or other speculative beliefs.  However, for the most part, they are simply attempting to sell them because their wider spreads yields higher commissions - which, by the way, has been a particularly prevalent practice since gold and silver prices started falling three years ago.  Many of these firms are desperate for business - and thus, are "doubling up" their aggressiveness in marketing these highly risky assets.

Essentially, numismatics are little different than baseball cards, rare art or even real estate - in that a significant percentage of their "value" is entirely subjective.  Generally speaking, we believe numismatics are principally for experienced coin collectors - in most cases, because it's actually their hobby.  However, in the rare case where coins with actual scarcity or other unique characteristics trade at a very low premium to underlying bullion intrinsic value, we actively market them - given they may have some "option value" that you get essentially for free.  A great example is some of the Royal Canadian Mint limited edition Maple Leaf series, which from time to time trade at prices not significantly different from generic Maples Leafs.

 

 

From David's Desk

David Schectman

Quotes of the Day

This would be a very important and hugely legitimate endeavor for [First Majestic Silver CEO] Keith Neumeyer to pursue---and I highly encourage that he do so. But it's also important for him to recognize that he better cross his t's and dot his i's when dealing with the likes of JPMorgan and the CME Group. You want to make sure you're on highly factual (and legal) ground. Go after these dudes with anything less than all the facts and, figuratively speaking, you'll end up picking your teeth off the ground with a broken arm. Armed with the facts they are reduced to silence.

It's not my place to chastise and correct the misstatements that many seem to make in reporting on precious metals, as I'm not anyone's schoolmarm. But Mr. Neumeyer may be uniquely positioned to do something monumental, namely, bring to the forefront a complaint of manipulation from a producer's perspective. But misquote a single fact and it will all be for naught.

- Silver analyst Ted Butler, Butler Research, October 25, 2014

 

Even though there was very little volume in either gold or silver yesterday, it was apparent---at least to me---that their respective prices were being quietly managed, as they weren't allowed to break above their Friday closes no matter how many attempts were made.

One thing that hasn't changed is the continuing price decline in gold after it's 'failure' at its 50-day moving average last week---which the 6-month gold chart shows.  Not surprisingly, the silver price is following suit.

- Ed Steer, Casey Research, October 28, 2014

 

 

Today's Featured Articles

 

Greg Hunter (Greg Hunter interviews Andy Hoffman - The Global Economy Has Collapsed)

 

Leibovit(A Physical Silver Market Cartel?)  

 

Jim Sinclair (Gold at $7,000 article goes viral in Chinese media) (Russia's new gas exchange could lead to energy pricing outside the dollar)

 

GATA (China launches direct trade between yuan, Singapore dollar, bypassing U.S. dollar)

 

Zero Hedge (How China & Gold Will Shape The Future)

 

LeMetropole Caf� (Shanghai Posts 51.5 Tonnes of Gold For the Week: How Long Can the Gold Pool Be Sustained - Jesse)

 

Ed Steer (Four critical reads for today)

 

Sincerely,

David Schectman

The Holter Report

Bill Holter

Alan Greenspan "Cleansing His Legacy" Part 1

October 29, 2014

 

While deciding how to write this piece regarding the interviews of Alan Greenspan, it dawned on me that has to be done in 2 parts.  GATA followers had very high hopes Mr. Greenspan could be pinned down with nowhere to go regarding the central banks forays into the gold market, these hopes were dashed ...sort of.  In this piece I will try to relate to you what was said in the first of two interviews of Alan Greenspan by Gary Alexander.  Along the way I plan to give my opinions of what was said and where injected logic might be helpful.  

 

The interview started off with questions of Mr. Greenspan's early years as a follower of Ayn Rand.  She was described as "pure logic," and with her reason was everything.  The former chairman described his time working with Rand as living in a theoretical world.  He admitted to his written piece in 1966 in the support of gold as money and the gold standard.  Leaving the private sector and joining the public he said was "leaving the theoretical world and entering the practical world."  He told of an early paper he wrote where he suggested agricultural subsidies made no sense, not even to farmers.  He said Washington was up in arms over the paper and it was this that opened his eyes.  He realized he had to "conform" his actions even if he did not change his philosophy.  It was at this point Mr. Greenspan said "I couldn't work in today's world" and everything must be compromised.  What he politely was saying is either "sell out or stay out."

 

When asked about his time on the Social Security board under Ronald Reagan, Greenspan said he was then and is still now in favor of privatizing the program but it "had to funded."  He made two comments in this segment which I am not sure how connected they were to the current topic of Social Security, he said he "believes he has changed the world" and "printing money makes systems fall apart."  These are both true statements and in my opinion the beginning moves to "cleanse his legacy."  My opinion of this first of three parts was Mr. Greenspan trying to explain that he had to conform to Washington where his (Rand's) idealism could not work.  He did say and I quote, "I never changed my philosophy or views, I had to change my actions to conform."  Ayn Rand had many famous quotes, the one which I believe would drain the blood from Mr. Greenspan's face is as follows: "There is a level of cowardice lower than that of the conformist: the fashionable non-conformist."  This is exactly how I believe Mr. Greenspan is trying to portray his legacy, the fashionable non-conformist.     

 

The 2nd part of the interview, Gary Alexander asked several questions of Mr. Greenspan's chairman years.   The question regarding going back to a gold standard was answered with "a gold standard is not possible in a welfare state."  Without saying it, you can understand his thought process here, under a gold standard there is no way for politicians to conjure (free) money out of thin air to give away, only with debt based money can this be done.  When asked if the Fed or central banks tried to control the price of gold he answered a flat "no" and then added "only other central banks."  This to me was curious as "other central banks" during those years were strict puppets of the Fed.  So there was no admission of Fed intervention but at least he "pointed a finger" so to speak.

 

Finally, Gary asked about "bubbles" and whether or not the low rates from 2001-2004 which he presided over were the cause of the housing crisis?  Greenspan morphed into his old Congressional testimony form and passed the buck on this one.  He said the major cause to the housing bubble were Fannie Mae and Freddie Mac.  He said they were "subsidized" federally and built up loan portfolios too high.  HUD, MBS and affordable housing issues along with the loosening of credit standards were the root cause of the bubble, not abnormally low rates.  He also mentioned the adjustable rate market as what in his words "blew the market apart."  Without any further comment, I will just say one word ..."disingenuous."   

 

The final part of the interview dealt with his years after the Fed.  Mr. Greenspan recounted how Paul Volcker never spoke publicly while he was in office regarding monetary policy and neither would he.  He was asked about 0% interest rates and inflation.  His answer was true in my opinion and one which I have written of many times (even though we certainly have much higher inflation "leaking out" than is being reported).  He said very low interest rates, massive credit creation and money supply growth have not translated to hyperinflation (yet) because of low "velocity".  The banks so far are sitting on massive quantities of money supply and are earning a "risk free" .25 basis points.  As long as the banks don't begin to lend or use the cash, inflation will remain subdued but the balances are like "kindling wood" which if ignited could start a raging fire.  He also mentioned there is much capital coming in from European banks thirsting for positive yields as Europe is inverted.

 

Close to the end was the best part because the former chairman in my opinion was given a couple of tough questions where he was forced to lie and also told part truths.  He was asked if there were any discussions between the Fed and the Treasury regarding deficits and our national debt.  In my notes I wrote "never" as being the answer to which I can only say "REALLY???"  You never, ever, ever spoke to the Treasury Secretary or an underling regarding the country's debt?  Isn't that what you "purchase" day in and day out ..."Treasuries?"  You never, ever were given a heads up as to "how much" of this debt was going to be issued by the Treasury in case the Fed had to step up and purchase in their role as lender of last resort?  Actually, I can remember Greenspan testifying before Congress that monetary policy "couldn't solve all problems," the budget needed to be more in balance (a Congressional job) and the deficits needed to be lessened.  I won't bother to do the research but I am sure there are records of phone calls and meetings between the chairman and Treasury secretary, there are plenty of records between Geithner and Bernanke.  Did he and Robert Rubin ask how each other's family were doing and whether or not it was going to rain the next day?  Like I said, "really?"

 

His answer to the "too big to fail" question was very good and I say BRAVO...except he did not have the backbone to let it happen on his watch!  He postulated that TBTF was the recipe to stagnation and that "creative destruction" is a necessary evil for capitalism.  Creative destruction, meaning "bankruptcy" as punishment for a poor business decision or decisions.  He went on to recount how well the RTC worked in the early 1990's and actually ended up costing less than projected by letting the markets heal and clean the wounds.  In his opinion, the RTC cannot be duplicated now.

 

I do want to point out the obvious here and why the RTC can never be duplicated again.  The 2008 crisis and now any new crisis cannot ever be allowed the punishment of pure Mother Nature... although this is exactly what will happen, let me explain.  Even though this is exactly what should have been allowed in 1991, 2001 and again in 2008, "they" wouldn't let it happen.  They wouldn't (couldn't) let it happen because the financial system itself was getting bigger and bigger, so big that a daisy chain of bankruptcies was feared would cascade into an outright deflation and take government finances with it.  You see, in a fiat/deficit world the government must have the ability to borrow ...in order to pay...interest that is.  If markets were to go totally dysfunctional it would mean the Treasury would have no way of actually paying current interest and settling maturing debt.   

 

So, there can now never be this "creative destruction" that Mr. Greenspan is speaking of these years later.  "Inflate or die" lived and breathed down his neck while chairman of the Federal Reserve.  He tried to talk a good game but if you know and understand financial and economic history, his modus operandi today is merely to cleanse his legacy before the final collapse and reset of the global financial system.  In my opinion, he had a perfect opportunity in 1991 to allow "creative destruction," he missed it and we went to war with Iraq to help the reflation.  His last and final chance was 2001 but by then, the odds favor that it would have been the total destruction of the financial system due to size and leverage.  Since 2001 there has been and can never be a "creative destruction."  2008 saw TARP, ZIRP, $16 trillion of secret Fed loans and all the rest to forestall the destruction...next time there will be nothing available to hold back Mother Nature's wrath.

 

Finally, he was asked if interest rates and gold 5 years from now would be higher or lower to which he answered "higher and higher."  When asked "how much?" he replied "considerably!"

 

This finishes part one, the second interview was much more interesting to me and there was much more discussion of gold, stay tuned!

 

Andy Hoffman's Daily Thoughts

The "End of QE" - LOL

October 28, 2014

 

In July 2012, Barrack Obama catered to the "99% on his campaign trail" - knowing full well elections are no longer about progress (let alone, "hope" or "change") but which candidate promises the most entitlements. Two years later, with the nation in vastly worse shape both economically and financially, Hillary Clinton is doing the same, rehashing Obama's "you didn't build that" quote by saying, "don't let anybody tell you it's corporations and businesses that create jobs"; like Obama, suggesting big government is the foundation of America's "success." Frankly, it's difficult to decide whether to scream with rage or cry with sorrow at just how far our great nation has fallen. Government no longer governs but controls our lives - whilst our top politicians are no longer wise businesspeople but simple "heirs." Who's next after Hillary? Jeb Bush? Chelsea Clinton? Ronnie Reagan? Amy Carter?

 

As the Fed meets to decide how to propagandize tomorrow's FOMC statement, there are simply too many "horrible headlines" to keep track of. The world has become a very dangerous and scary place with countless political, economic, and social bonfires burning simultaneously - in our view, catalyzed first and foremost by the inflation created by four-plus decades of history's most destructive Ponzi scheme. Look no further than the raging blaze of serial currency collapses - which we deem the "single most bullish precious metal factor imaginable"; which sadly, the brainwashed MSM not only ignores but doesn't understand. As I write, countless currencies sit at or near multi-year lows - like the Russian Ruble, Indonesian Rupiah, South African Rand and Brazilian Real; yielding dramatic cost pressures for hundreds of millions of people, whilst Western propagandists spew lies regarding the "deflation" that not only does not exist, but cannot in a fiat currency regime.

 

In the latter case, Brazilian stocks are crashing as rapidly as the Real, as this week's Presidential election cast further doubt on the nation's tenuous future. However, politics are immaterial when contrasted with the humanity behind them. And in Brazil's case, this horrifying article about the drought we have highlighted all year depicts a nation on the verge of catastrophic tragedy - as its largest city, Sao Paolo, may have less than a month of fresh water left. If the drought doesn't abate soon, not only will global sugar, soybean, coffee and beef prices continue to surge, but countless thousands of Brazilian lives could be lost. And since this story is horrifying enough, we won't even update you on the equally terrifying prospects for California's economy and population if its own historic drought doesn't shortly abate.

 

Again, despite historic manipulation, TPTB cannot prevent "Economic Mother Nature" from baring her claws. Ultimately, her wrath will be fully felt - and as they say, "hell hath no fury like a woman scorned." Currently, her presence could not be more obvious in said currency markets nor crude oil, as it continues to flirt with $80/bbl; and of course, Western bond markets - where plunging rates attest to the "most damning proof yet of QE failure." She still hasn't been able to overcome the naked shorting of paper gold and silver, as well as the surreptitious dishoarding of the vast majority of physical reserves in the name of maintaining a destructive, distorting, inequality engendering status quo. But don't worry, all good things to those who wait. And reading of how a single hedge fund - Red Kite, who I actually had dealings with in my prior life in the mining business - has cornered up to 90% of the London copper market; much less, gold and silver forward rates again turning negative, we could not be more confident that the two-decade suppression of precious metals is nearing its inglorious end. And when it does, this "Achilles Heel of the financial world" may well be the catalyst to blow it sky high.

 

In the run-up to tomorrow's supposedly "historic" FOMC decision to end QE - at least, overtly - we have NEVER seen such blatant market manipulation. Remember, the Fed's objectives have NOTHING to do the economy; but instead, saying what it takes to support financial markets (and "adjunct" markets like real estate) - and doing the same, even if its deeds are diametrically opposed to its words. To wit, it was just two weeks ago when markets were plunging in front of the key "propaganda events" of this week's FOMC meeting and next week's elections. And thus, the Fed resorted to a chaotic combination of "manipulation, jawboning, and prayer." This week, with markets "stabilized" they have simply stepped up the manipulation and thrown in several "rumors" - like increased ECB QE - to fan the flames, enabling the Fed as much leeway as it needs. Bad economic data plus strong markets is their best possible scenario - as it allows them to be uber-dovish in a non-crisis environment. And voila, look at what they've created!

 

In the past three days, we have seen horrifying across-the-board economic misses - starting with Friday's "all-time biggest lie" when August's New Home Sales data was revised massively downward; to yesterday's decline in the PMI service index; to today's massive "unexpected" durable goods order plunge and fourth straight "unexpected" decline in the Case-Shiller national home price index. The fact that Washington's book cookers published the highest "consumer confidence" report since October 2007 (based solely on "expectations") only proves TPTB's propaganda tactics are running on fumes - as at this point, it's becoming laughableto believe recovery is even possible, especially when the entire world is openly in recession.

 

And thus, all that remains in the TPTB's "arsenal" of deceit is money printing - which ultimately, must catalyze hyperinflation - and exponentially increased market manipulation. To wit, take a look at the past two days' "trading action"; utilizing the same exact tried-and-true algorithms we have described for years - whilst commodities, currencies and even European stocks plunged.

  

    

And no, this is not an illusion - they actually represent data from two different days; featuring the eighth straight "Dow Jones Propaganda Average" dead ringer algorithm; PM attacks at the 10:00 AM EST "key attack time #1"; and requisite DLITG or "Don't Let it Turn Green" algorithms for the remainder of both days.   

  

  

BTW, today is no different - as following a third straight "2:15 AM" EST attack, PMs have been driven down by prototypical "Cartel Herald" algorithms at 10:00 AM EST when the global physical markets close - whilst stocks again surge higher, despite not only the aforementioned durable goods and home price data but yet another plunge in a bellwether stock - Twitter; which for once, I agree with a "top Saudi cleric's" assessment as being the "source of all evil." Well, maybe not all evil; but certainly, the dumbing down of Western society - including those that listened to Jim Cramer's September prediction that Twitter, GoPro, Tesla and Netflix will be "irresistible" stocks through year-end. And since that prediction? Twitter is down 17%, GoPro 20%, Tesla 18% and Netflix 21% - whilst the NASDAQ composite index is...drum roll please...unchanged. Gee, I wonder why CNBC's ratings are at an all-time low.

 

And speaking of CNBC, here's the perfect lead-in to today's primary topic; the laughable "end of QE" that it and other cheerleading MSM outlets have been spinning. Steve Liesman, CNBC's "Chief Economist" demonstrated a "consensus" timeline forecasting the Fed's first rate hike in June 2015 (nine months from now, despite being seven years into a "recovery"); its first balance sheet reduction in October 2015; and a "terminal Fed Funds rate" of 3.3% or barely half the historical average in December 2017. Wow, that's quite a precise chronology - incorporating the Fed's ambiguous "considerable time" language, world-class economic forecasting abilities, and "just right" conclusion of an interest rate "higher" than today, but just low enough to not destroy history's largest debt edifice - or so they hope. I'm sure the "consensus" inflation forecast is 2.0% as well, mirroring the Fed's expectation exactly.

 

Hence, the historically unparalleled game of money printing, market manipulation and propaganda that started April 11^th, 2013, when Obama had a "closed-door" meeting with the top ten "TBTF" bank CEOs. A day later, gold and silver were violently attacked, and two weeks later, rates surged from record low levels as the amorphous "tapering" campaign commenced. Since then, all objective measures of U.S. and international economic activity have dramatically declined, currency and commodity markets have crashed, social unrest has exploded, and of course, precious metal prices have been pushed below their respective costs of production. Conversely, stock prices have surged to record levels - at least, the handful within the major indices the PPT supports; whilst interest rates remain at or near record lows. In other words, whilst the global economy has crashed and burned, the "1%" holding stocks and bonds in the nations with the most advanced "manipulation operatives" have grown significantly richer. And of course, those who appropriately protected themselves with precious metals have been punished - particularly those that speculated in "Paper PM Investments" like mining stocks, ETFs and closed-end funds.

 

Of course, all conversations lead back to "Economic Mother Nature" - who in time always wins. The Fed will probably end overt QE3 tomorrow; but make no mistake, covert QE goes on indefinitely, depending on the day's needs. Trust me, when you see the Dow's "dead ringer" pattern continuing at 10:00 AM EST each day - despite the supposed "end" of QE "POMO" operations - you'll know exactly what we mean. And more importantly, the "end" of QE3 doesn't mean the end of overt QE; but simply, QE3. In other words, QEs 4, 5 and infinity are just around the corner waiting for their catalyst. And when they do inevitably arrive - as the "countdown to the Yellen reversal" continues, if you don't have your gold and silver already, you may never get the chance; certainly not at prices even remotely close to today's historically suppressed levels.

 

 

 

Interview with Republic Broadcasting Network

Radio Appearance with John Stadtmiller - October 28, 2014

October 29, 2014

 

Andy Hoffman joins John Stadtmiller of the Republic Broadcasting Network to discuss the U.S. job market, oil prices, the state of the economy, retail sales, gold and silver.  To listen to the interview, please click below.  

 

Featured Articles

Global Economy Has Collapsed-Andy Hoffman - usawatchdog.com

By Greg Hunter On October 27, 2014

By Greg Hunter's USAWatchdog.com

 

Financial analyst Andy Hoffman says the real global economy is in deep trouble, which is much to the chagrin of the Fed. Hoffman explains, "Recall last April, they started smashing gold and started with the 'taper' talk. The Fed figured by about this time, they'd be ready to start hiking rates. The fact is the global economy has collapsed. Our real economy has collapsed. Forget the fake PMI numbers or their ridiculous employment numbers. The economy of the world is getting worse and worse and worse.  No matter how hard they try to say yes, there is a recovery and we are tapering. Interest rates keep falling and falling. There are plunging rates despite all their talk of recovery and tapering." Hoffman, who also has deep Wall Street experience, points to the recent sell-off in the stock market and the Fed's reaction. Hoffman contends, "The Dow Jones propaganda average fell a whopping 9% from its all-time highs. The Fed absolutely freaked out. Within minutes, they had the Plunge Protection Team (PPT) running it back up, and no less than six Fed Governors in the space of three days came out and called for extension of QE and extension of zero-percent-interest-rates (ZERP). That's how terrified they are, and remember, next week is when QE is supposed to end."

 

Why is the Fed so terrified with even a relatively small market drop from all-time highs? Hoffman thinks, "Their fear is a loss of confidence in the dollar. It's that simple. . . . Since 2008, all they have left in their arsenal is money printing, market manipulation and propaganda. The propaganda doesn't work anymore. Nobody believes in recovery, and everyone knows it's not true." Hoffman also points out, "Just think about the perception if the Dow fell a thousand points in a day or, let alone, three or four thousand points in a day. They would call it the crash of 1929. Look at Europe. Twenty-five European banks failed the stress test. . . . The banking system, as a whole, is on the precipice right now, and the slightest drop will cause the whole 2008 calamity to start all over again. . . . Once that confidence leaves, everyone races out of currencies, and the stock market and the whole economy mirage collapses."

 

Hoffman also contends that "economic Mother Nature" is going to have the last word on all markets despite propaganda and manipulation. Hoffman says, "If you are going to try to push gold and silver prices below the cost of production, if you are going to take interest rates way below what they should be and take stock prices way above where they were in 2008, you are going to have a catastrophic collapse. People say the stock market is up and things must be fine-no. . . . Across the board, you are seeing commodities and currencies crash around the world. Of course, the real way economic Mother Nature is going to get back at us is with gold and silver because manipulators cannot create physical gold and silver, and you are seeing inventories drained with record demand. We are going to see economic Mother Nature showing all of her claws."

 

Hoffman closes by saying, "This is decades and decades of a mad experiment in global fiat currency, and it's going to come to an end. No matter how we get to the other side, it's going to be ugly. The other side one day will be good, but the other side is going to take a long time to get to, and there is going to be a lot of pain and hardship and, hopefully, not world war."

 

Join Greg Hunter as he goes One-on-One with Andy Hoffman of Miles Franklin, one of the biggest precious metals dealers in America.

 

(There is much more in the video interview.)

 

Andy Hoffman-Fed's Biggest Fear-Loss of Confidence in Dollar

 

___________________________

 

 

 

A PHYSICAL SILVER MARKET CARTEL? - www.vrtrader.com

  

It is one of the most important news stories in the financial markets in years and certainly with regard to the current bear market in the precious metals, we heard this week that Keith Neumeyer, President and CEO of First Majestic Silver Corp. (AG-NYSE) has call for the formation of a physical silver market cartel in order to counter what I've been referring to for quite some time as the 'phony' paper market on the COMEX exchange here in the U.S. He is calling for other producers to halt sales for 30 days sometime in 2015 as a demonstration or 'call to arms'. The paper market, of course, is the futures market where silver contracts trade, not the physical metal. In a typical DAY nearly 1 billion ounces of silver can trade on the COMEX, but actual ANNUAL physical production of silver is at approximately 800 million ounces. The disconnect is huge.

  

My background includes a short stint on the Chicago Board Options Exchange (C.B.O.E) just one floor removed from the Board of Trade where physical agricultural commodities traded. The futures market were created as a mechanism for physical producers (like farmers) to hedge their production. In other words, a farmer can sell his crop via a futures contract locking in a specific price for a specific period of time knowing that regardless of the day-to-day fluctuations in price he will get paid. That contract could later be purchased (cover his position) or he could physically deliver the crop assuming it met delivery requirements specified by the exchange. The silver (and gold) market are not that honest. The sales that are occurring (in large quantities) are not backed by the physical silver and research (most by www.gata.org) demonstrate it is Central Bank induced in order to suppress the price. I congratulate Keith Neumeyer for taking this step and hope other producers will follow.   

  

To read the full article, please subscribe to VRTrader.com.

 

___________________________

 

 

In The News Today - www.jsmineset.com

Posted October 26th, 2014 at 12:49 PM (CST) by Jim Sinclair

 

Gold at $7,000 article goes viral in Chinese media

October 25, 2014 / D.Collins

 

Gold at $7,000 article goes viral in Chinese media is going viral and one of the most viewed articles in the financial press. The article references American Jim Rickards and his concept of comparing inflation-adjusted gold prices. Most Chinese economists think that the price of gold should be approximately $ 2,400 / ounce, instead of the current $ 1,235.

 

The article references estimates by Jim Rickard's that if Central banks had to use gold to support its currency, then the price of gold will go to $ 7,000/ oz. That only includes the printing that has been done already, not the continuous printing of fiat currency that continues unabated by Central banks all over the world.

 

Today's volatile financial markets are a warning that today's assets have no actual real underpinning. There is no insurance. Gold stands as the bulwark.

 

Although the U.S. Dollar is the reserve currency of the world today, gold is the key to the new millennium of global trade balances.

 

The Dollar is losing its reserve status; holdings by Central Banks have been going down for decades. Meanwhile, Chinese RMB holdings are skyrocketing across the globe. The U.S. has been running trade deficits for 30 years, when the Dollars start to go back onshore their will be a global puke of the financial system and inflation levels the U.S. has not seen in its entire history.

 

More...

 

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In The News Today - www.jsmineset.com

Posted October 27th, 2014 at 9:30 AM (CST) by Jim Sinclair

 

Russia's new gas exchange could lead to energy pricing outside the dollar

October 24, 2014 8:33 AM MST

 

On Oct. 24, Russia launched a new and independent natural gas exchange that will reside in St. Petersburg, and will make the facility the largest market for natural gas trading in all of Europe. Known as the St. Petersburg International Mercantile Exchange (SPIMEX), this trade facility will allow for international and domestic gas operations to sell their products in Russia and in a centralized location, and will become part of the growing Eurasian Economic Zone that is emerging in the East as global trade moves away from the dollar and away from U.S. hegemony.

 

The importance of this independent market exchange is that natural gas can work towards a complete separation from oil, which under the current system tends to price both commodities on similar scales and in dollar denominations. It will also open up the market for new buyers who are solely interested in natural gas, and help facilitate a new pricing structure that will allow Russia and other gas producers to eventually remove the energy source from the petro-dollar and from U.S. control over the monetary component in gas trading.

 

Russia, the world's second-largest producer of natural gas, has launched its first auction of natural gas on Friday at the St. Petersburg International Mercantile Exchange (SPIMEX). It will be Europe's largest natural gas trading post.

 

The project is intended to create a more competitive market for natural gas prices, which at present are more-or-less tied to oil. Now, independent producers will have access to a broader range of buyers.

 

The exchange will facilitate up to 35 billion cubic meters of gas annually, with Gazprom, Russia's largest producer, maintaining the right to sell a half of that, and independent producers the remaining 17.5 billion cubic meters. - RT

 

More...

 

 

China launches direct trade between yuan, Singapore dollar, bypassing U.S. dollar - gata.org

Submitted by cpowell on 06:27AM ET Monday, October 27, 2014. Section: Daily Dispatches

 

From Xinhua News Agency

via China Central Television, Beijing

Monday, October 27, 2014

 

http://english.cntv.cn/2014/10/27/ARTI1414401659567921.shtml

 

BEIJING - China on Monday announced direct trading between the renminbi and Singapore dollar beginning Tuesday, marking another step toward internationalizing the Chinese currency.

 

The announcement by China Foreign Exchange Trading System extended the Yuan's list of direct onshore trade to more major currencies, including the U.S. dollar, the euro, British sterling, Japanese yen, Australian dollar, New Zealand dollar, Malaysian ringgit, and Russian ruble.

 

The move aims to boost bilateral trade and investment, facilitate the use of the two currencies in trade and investment settlement, and reduce exchange costs for market players, the foreign exchange trading system said in a statement.

 

The move is also expected to help Singapore in its bid to become a renminbi offshore center.

 

According to the arrangement, China's interbank foreign exchange market will kick off direct trading between the yuan and the Singapore dollar via spot, forward, and swap contracts.

 

With direct trading of their currencies, China and Singapore will be less dependent on the U.S. dollar to settle bilateral trade and investment deals.

 

Previously the exchange rate between the two currencies was calculated based on the yuan-U.S. dollar central parity rate and the Singapore dollar-U.S. dollar rate.

 

Now that the two currencies can be directly traded, the yuan-Singapore dollar rate will be set based on the average prices offered by market makers before the opening of the interbank foreign exchange market.

 

The foreign exchange trading system will publish its yuan/Singapore dollar central parity rate at 9:15 a.m. each trading day. The exchange rate on the spot market will be allowed to trade 3 percent higher or lower from parity.

 

The People's Bank of China, the central bank, authorized and welcomed the announcement, saying it is an important measure between the Chinese and Singaporean governments to jointly push forward bilateral and economic relations.

 

"The direct yuan-Singapore dollar trade is good for forming a direct exchange rate between the two currencies and reducing exchange costs," the PBOC said in a statement.

 

Vowing to "actively support" yuan-Singapore dollar direct trade, the PBOC said the move will also help boost financial cooperation between the two countries.

 

To boost the use of the yuan internationally, China has also signed multiple currency swap agreements totaling 2.9 trillion yuan (US$472 billion) with 26 overseas monetary authorities.

 

The PBOC has also authorized offshore renminbi clearing and settlement arrangements in Singapore, London, Frankfurt, Seoul, Paris, and Luxembourg, as well as Taiwan, Hong Kong, and Macao.

 

The Chinese government is gradually relaxing its hold over the yuan and making it a global reserve currency.

 

China is also under pressure to diversify its foreign exchange reserves, which stood at US$3.89 trillion at the end of June.

 

Continue reading on Gata.org.

 

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How China & Gold Will Shape The Future - www.zerohedge.com

Submitted by Tyler Durden on 10/26/2014 - 21:48 - 0400

 

Willem Middlekoop, author of The Big Reset - The War On Gold And The Financial Endgame, believes the current international monetary system has entered its last term and is up for a reset. Having predicted the collapse of the real estate market in 2006, (while Ben Bernanke didn't), Middlekoop asks (rhetorically) - can the global credit expansion 'experiment' from 2002 - 2008, which Bernanke completely underestimated, be compared to the global QE 'experiment' from 2008 - present? - the answer is worrisome. In the following presentation he shares his thoughts on the future of the global monetary system; and how gold, the US and China are paramount for its outcome.

 

Continue reading on Zero Hedge.com.

 

 

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10/27 Jesse - Shanghai Posts 51.5 Tonnes of Gold For the Week: How Long Can the Gold Pool Be Sustained - www.lemetropolecafe.com

 

Jesse

"For 'tis the sport to have the engineer

Hoist with his own petard: and it shall go hard

But I will delve one yard below their mines,

And blow them at the moon."

 

William Shakespeare, Hamlet

 

The Shanghai Gold Exchange, where investors actually take their bullion rather than just play liar's poker with multiple paper claims for the same ounces, saw 51.5 tonnes of gold bullion taken in the latest week.

 

The trend of physical deliveries has been rising the last 12 weeks.

 

To put this in perspective, if there are 32,150.75 troy ounces of gold in a metric tonne, then the Comex has a total of just under 28 tonnes of registered (deliverable) gold in all of its warehouses.

 

What is that, about three days supply in Shanghai? Not to mention the other gold bullion markets around the world.

 

Sounds more symbolic, than practical. Well, there can be great power in symbols- until long abused belief begins to falter, and confidence frays. And then one risks the danger of using too much force one too many times, and losing the faithful obedience of the public. And with it everything that allows a minority to govern.

 

There are another 239 tonnes in storage in all the Comex vaults, in the proper bullion eligible format, but not listed as deliverable at these prices. Sometimes owners feel comfortable keeping the bullion there for storage, eliminating the need to have the bullion assayed if they ever wish to sell it.

 

So what does this all mean? It means that the unsustainable will not be sustained.

 

Some day the price of gold will likely be whatever China, Russia and like-minded bullion markets say it is, the paper pushers in New York and London notwithstanding. The tangled web of free trade and globalization, ain't it a bitch?

 

It would already be so, except for the tired efforts of Wall Street's central banking friends and their access to leasing other people's bullion in a misguided effort to influence markets and rig their prices.

 

China and the rest of the world are apparently not yet tired of buying gold on the cheap.

 

But make no mistake: Shanghai talks, and Wall Street walks.

 

This chart from the data wrangler Nick Laird at Sharelynx.com.

 

 

 

To read the full article, please subscribe to Le Metropole Cafe.com.

  

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Australian Scholar Says Futures Markets Suppress Commodity Prices, Keep Producing Nations Poor - www.caseyresearch.com

October 28, 2014

 

Critical Reads

Grant Williams: This Little [Swiss] Piggy Bent the Market

 

In April 1999, the revision of the Federal Constitution was approved (how else than through a referendum?), and it came into effect on January 1, 2000.

 

Oh... sorry... I almost forgot to mention that in September 1999 - after the revision had been adopted but before it had been officially enacted - the Swiss National Bank became one of the signatories to the Washington Agreement on Gold Sales, meaning that all that lovely Swiss gold which had been sitting there, steadily accumulating and making the Swiss franc one of the last remaining "hard" currencies on the planet, was eligible to be sold.

 

A single line in the Swiss National Bank's own history of monetary policy identifies the beginning of the demise of one of the world's great currencies: On 2 May, the SNB begins selling gold holdings no longer required for monetary policy purposes.

And there you have it. "No longer required for monetary policy purposes."

 

That's what happens when you finally embrace the beauty of fiat. Not only do you get to sell gold, you get to call the proceeds of those sales "profits."  The absurdity borders on breathtaking.

 

I spent a good deal of time talking to Grant at the Casey Conference in San Antonio last month---and we got along fabulously well.  This long treatise on the Swiss Gold Referendum falls into the absolute must read category, because it spells out in no uncertain terms what's at stake.

 

Read more...

 

Gold price suppression documents cited in debate at New Orleans conference

 

Documents that were included in a PowerPoint presentation by your secretary/treasurer during his debate with Doug Casey of Casey Research on Thursday, October 23, at the New Orleans Investment Conference -- a debate whose proposition was "Gold Manipulation: Real or Imagined?," with your secretary/treasurer arguing that it is real -- are cited below, though, because of lack of time, not all of them were reviewed during the debate.

 

There are a lot of links in this post that I found on the gata.org Internet site yesterday.  So, if you're going to wade through them, I'd start by topping up your coffee if I were you.

 

Read more...

 

The Day The POMO Died

 

For those who follow the Fed's daily intervention in the stock market, today is a historic, if bittersweet day: this is the day when the Permanent Open Market Operations (or POMO) as a result of the QE3 program launched in December 2012, finally die (at least until they are reincarnated yet again).

 

Today, at 11:00 am, the NY Fed's market desk will conclude its 933rd POMO since August 25 of 2005, when it will inject just about a $1 billion in the stock market in the form of a $0.85-$1.05 billion buyback of long-end bonds. And with that, Simon Potter's open market operations desk located on the 9th floor of Liberty 33, will be put on temporary hiatus.

 

And with that, QE3 will end.  Or not.

 

This Zero Hedge piece, with a couple of excellent charts, is worth your while---and I thank Manitoba reader U.M. for her first contribution to today's column.

 

Read more...

 

Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away - until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes - in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

"How can this happen?" Ms. Hinders said in a recent interview. "Who takes your money before they prove that you've done anything wrong with it?"

The federal government does.

This news item appeared on The New York Times website on Saturday---and it's the second offering in a row from reader U.D.

Read more...

 

Market Recap

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